More Affordable Housing on the Horizon

by Jackie Dee King

Affordable housing in Cambridge will get a boost within the next year or two, if the City Council heeds the advice of a recent consultant’s report.

The percentage of affordable units required in new housing developments could jump from the current 11.5% to 20%, while still remaining economically feasible for developers, according to an analysis by David Paul Rosen and Associates (DRA).

The city released the long-awaited consultant’s report in April, after hiring the firm in 2014 to update the “inclusionary housing” provision of the city’s zoning ordinance. The formula has not been changed since 1998, when the affordable housing requirement was set at 11.5%. *

“I support the conclusions you’ve reached,” Councilor Nadeem Mazen told the DRA representative at the City Council’s May 31 Housing Committee meeting. “These [developers’] profit rates are unseen in almost any other industry…We have incredible latitude to push toward a more just and equitable housing development policy here in Cambridge.”

The Cambridge Residents Alliance and others have been pressing the city for years to raise the percentage of affordable units required in projects filled mostly with expensive market-rate apartments. “We have lost so many people already,” Kathy Watkins (photo left) said. “It’s vital that the city move ahead with all due speed to increase the amount of affordable units required in all new projects. It’s one way of combating displacement.”

A Changing City

While the city has been slow to act, housing prices have soared in Cambridge.

Between 2007 and 2014, according to the report, area median income increased a total of 14%, while the median two-bedroom asking rent increased 31% and sales prices of homes increased even more sharply. The percentage of rental households that are cost-burdened (meaning they pay more than 30% of gross income on housing) rose from 40% in 2000 to 45% in 2014. A full 24% of households pay more than 50% of their income on housing.

These housing prices have clearly affected the demographics of the city. Thousands of people—longtime families, low and moderate income tenants, immigrants, young people, —have been squeezed out. The decline has been especially sharp in those households with incomes between 50 and 100% of area median income, falling from 27% to 18% -- while households with incomes above 120% of area median income increased from 35% to 47% of the Cambridge population.

The Cambridge Residents Alliance supports a 25% inclusionary requirement: 20% set aside for low and moderate income tenants, 5% for middle income. We also want at least 20% of inclusionary units to be three-bedroom, to help keep families in the city. However, as we study the report, hold meetings of our members, and participate in the citywide discussion, we will keep an open mind about the issues raised.

Councilors Weigh In

Many of the comments from both the public and councilors revolved around the implied threat of developers to either leave the city, or develop commercial instead of residential space, if affordable housing requirements become too high.

Councilor Dennis Carlone questioned the consultant about ways to re-zone certain sections or sites in the city with a required percentage of residential, as a way to sidestep that threat. He also raised concerns about height in relation to the surrounding area. “Height is an issue, and will continue to be,” he noted. “We are a relatively low-rise city…We want buildings that fit in with the neighborhoods.”

Councilor Marc McGovern, after noting that developers are primarily interested in maximizing their profits, said, “There are two things I care most about: Let’s get the highest possible percentage of affordable units. And let’s set a required amount of larger 3-bedroom units so that families can stay here.” He added, “We want to do as much as possible, so that the developers might scream, but they won’t leave. We have to find the sweet spot.”

Councilor Mazen noted that the demand for housing in Cambridge was “almost infinite” and that therefore the City Council had tremendous leverage in setting the conditions for development. If one developer did decide to leave, he said, there were many others coming down the road, eager to build in Cambridge.

Inclusionary Zoning Just Part of Solution

Another major theme to emerge from the Housing Committee May 31 meeting was that inclusionary zoning—important as it is—should be just one part of an overall plan for affordable housing in Cambridge. The Cambridge Residents Alliance strongly agrees. For example: 1) We support the development of 100% affordable housing on city-owned lots. A recent development of 100% affordable, at Port Landing on Harvard Street, shows that it can be done. 2) We also helped generate much of the civic engagement that pushed the City Council to nearly triple the “linkage” contributions developers of large commercial properties are required to make to the city’s Affordable Housing Trust. We believe the linkage formula should be revisited and increased periodically.

These additional affordable housing measures are important, because tall towers of mostly luxury priced units—even with their inclusionary units—drive prices up in surrounding neighborhoods, as a Lincoln Land Institute study showed.

Key Questions Remain

Many issues remain to be debated and resolved in the coming months. Some of the following were raised at the meeting; others are concerns of ours:

Will the city move quickly to adopt the new inclusionary zoning formula, given how fast new residential developments are coming on the market? (Some 7,000 units have been built or have entered the pipeline in recent years. Most of these developments include only the currently required 11.5% of affordable units.)

Will the new, increased affordable requirement be applied to developments under discussion but not yet under contract? For example, how about housing proposed for the Volpe site?

How can the city best include height and density considerations into the mix of decisions, in order to promote development of housing while at same time respecting the character of surrounding neighborhoods and quality of life?

Is it wise to reserve “premium” units (for example, top floors) for high-end renters, thus excluding “inclusionary” tenants, in exchange for requiring more affordable units in a project? Some current tenants of inclusionary apartments fear that such a measure could further the feeling of second-class citizenship they sometimes experience, Watkins said.

*The city called the inclusionary requirement 15% but that figure was misleading because it did not take into account the extra density bonus developers received for adding the affordable units. The net amount of affordable units required was 11.5%.